Profit


Incentives Overview

Puerto Rico offers a wide array of incentives for local and foreign companies to establish and grow in the Island. We offer an attractive tax structure and economic incentives while strategically balancing the investment of external capital with the creation of local companies promoting the continuous transfer of innovation and technology between them. The main incentive acts are:

The Economic Incentives Act for the Development of Puerto Rico (Act No. 73 of 2008), was established to provide the adequate environment and opportunities to continue developing a local industry, offer an attractive tax proposal, draw direct external investment and promote economic development in Puerto Rico. Some of the benefits that this Act provides are:

  • 4% Corporate income tax rate for manufacturing & related activities (12% withholding tax on royalty payment)
  • 50% tax credit for eligible research and development activities
  • 90% exemption for 15 years on real and personal property taxes
  • 60% exemption on municipal license tax
  • 100% exemption on dividends distribution

Export Services Act (Act No. 20 of 2012), known as the Act to Promote the Exportation of Services, provides attractive tax incentives for companies that establish and expand their export services businesses in the island.

In addition, the law promotes investments on research and development and initiatives from the academic and private sectors by granting credits and exemptions for these activities. Furthermore, it helps to decrease operational and energy spending for companies moving to the island in order to help their operations remain profitable and efficient. Some of the benefits of Act 20 are:

  • 4% fixed income tax rate on export services. (Rate may be reduced to 3% when 90% of gross income is derived from export services and the export services are considered to be strategic)
  • 100% exemption on dividends distribution.

Recent changes in incentive laws, Acts 20, 22 and 73, make them more accessible to SMEs. Read more about these ammendments here .

Puerto Rico Incentive Code

The Department of Economic Development and Commerce is in the process of developing the Puerto Rico Incentive Code. This Code will consolidate dozens of decrees, incentives, subsidies, credits, reimbursements, or contributory or financial benefits.

The Code is intended to promote the environment, opportunities, and appropriate tools to foster Puerto Rico's sustainable economic development. In addition, it will unify and rationalize in one place all the economic incentives offered by the Government of Puerto Rico. The new Code will establish the legal and administrative framework that will govern the application, evaluation, concession or refusal of incentives by the Government of Puerto Rico; and will serve as a promotional tool for investment in the island

Incentives will be measured by the creation of jobs and the creation of wealth. Innovation companies will receive tax incentives aimed at fostering job creation.

Contact us for a customized proposal of the incentives applicable to your company.

General Incentives